To remain in splendid isolation. Is Britain's refusal to commit to Europe neurotic or a mark of common sense? John Gray on why Will Hutton is wrong about our place in the world and why there may never be a referendum on the euro

The World We're In

Will Hutton <em>Little, Brown, 320pp, £17.99</em>

ISBN 0316858714

The relationship of Britain to the rest of Europe can be seen as thoroughly neurotic - or surprisingly sane. Refusing to decide whether we are Europeans or Americans could be a sign of our inability to commit ourselves - a classic sign, so we are constantly told, of immaturity in personal relationships. This is the view of the more extreme Eurosceptics and of the dwindling band of Euro-enthusiasts, and it is tacitly endorsed by the conventional wisdom among politicians and business people, which says that eventually Britain will have to decide its place in the world. If there is a consensus on the issue, this is it.

But there is another view. As I see it, the British refusal to commit to Europe is a mark of common sense. In its values and outlook, Britain is a hybrid country - part European, part transatlantic, part global. The different elements that make up the British identity do not add up to a single, unambiguous identity. There is nothing wrong in this. As with personal identity, national identity does not have to be unequivocal. Indeed, it is often better by being plural. Britain does not need to make an irrevocable choice of the kind urged on it by both sides of the debate on Europe. It will do best if it steadfastly refuses to commit itself either way. Oddly enough, that seems to me to be the most likely outcome.

Will Hutton is a committed and passionate pro-European. The World We're In plugs an extraordinary gap in public discourse. There have been many apocalyptic Eurosceptic texts forecasting doom if Britain enters more deeply into the European Union, but so far there has been no counterweight to them - a wide-ranging, no-holds-barred defence of the view that Britain's destiny is as a full member of a much more deeply integrated EU. Hutton compellingly provides what British debate demands: an uncompromising defence of the European model of capitalism and government. A worthy successor to the bestselling The State We're In, this will be the pro-European text for years to come.

But Hutton is best read with a large dose of scepticism. If the case for the European model is unlikely to be better stated, that is partly because there is no such thing. European capitalism is far from monolithic, and it is a mistake to treat the German social market as if it were the unfolding essence of a pan-European system of political economy. Different forms of capitalism arise from different cultural traditions and historical circumstances. It is no accident that Danish capitalism is different in many important respects from Italian or French capitalism. The patterns of religious belief and family life and the forms of government in these countries have always been dissimilar. Nor are they likely to converge any time soon. Does anyone really believe that the political culture of Greece will come to resemble that of Sweden in the foreseeable future?

As one might expect, Hutton's exaggeration of the similarities among European countries is most apparent in the case of Britain. It is true that, in some contexts, British public values are more European than American. We expect more of government than Americans do. We are less mobile. We have a deeper sense of historical roots. But we differ from most other European countries in some equally important respects. British capitalism has long been less corporatist and more individualistic than German or French capitalism. In nearly all other European countries, national identity is still understood in ethnic terms, whereas British nationality has never been based mainly on blood ties, if only because the British state remains an imperial construction.

Moreover, our conception of democracy is very different from what prevails in Continental Europe, as Hutton himself acknowledges. In our winner-takes-all democracy, voters decide whether they want an alternative government. In the more corporate systems of most European countries, they choose a party to negotiate with other parties. Hutton has no doubt that the latter system is preferable. I am not so sure.

A striking feature of Hutton's account of the European model is how little he says about its defects. Reading The World We're In, you would never guess that far-right parties have an increasingly pivotal role in European politics. True, there are a few references to European racism, but it is placed firmly in the past. One cannot fault Hutton for not anticipating that the leader of the French National Front would end up in the run-off for the presidency. But has he not noticed that far-right parties have had power in national government in European countries such as Italy and Austria for many years? No one pretends that America is free of racism; but despite all its defects, it is unthinkable that, say, George Wallace or Pat Buchanan could ever get as close as Jean-Marie Le Pen has done to the country's supreme office. What does that say about the European model?

Much of the polemical thrust of The World We're In derives from the stark contrast Hutton draws between Europe and the US. But the view he presents of America is overdrawn to the point of caricature. I have written as much as anybody about the flaws of the American model, particularly when it is taken to be universally applicable. But America's devotion to the free market is not set in stone. In the longer perspective of history, it may well prove to be an aberration from a more deeply entrenched mercantilist model. The imposition by President Bush of tariffs on steel imports may be unfortunate, but it shows that Hutton's picture of the US as being dominated by fanatical crusaders for laissez-faire is wide of the mark. Today, as in the past, the American political system is fluid and volatile, not least on the right.

Hutton wants a Europe that can act as a counterweight to US hegemony. Unfortunately, like many pro-Europeans, he defines this imagined polity by its opposition to a crudely oversimplified version of American values. A European superstate of this kind does not seem to me to be obviously desirable; but in any case, it is not remotely likely. Europeans are much too embroiled in their internecine antagonisms, and the EU far too sclerotic, for any such development to be realistically possible. But if there is any chance of Europe developing into something like a state, it can come to pass only if Britain remains semi-detached. Precisely because this is not and will never be an unambiguously European country, it will always act to slow down European integration. I am not sure there will ever be a referendum on our joining the euro. But if Will Hutton really wants a European superstate, he should join the No campaign.

John Gray is professor of European thought at the London School of Economics. His next book, Straw Dogs: thoughts on humans and other animals, will be published by Granta Books in September